Until the past few years people who intended to buy businesses probably focused on company histories, looking for enterprises with strong records of profitability. But in the fast changing economy of our new decade, past performance is no guarantee of future success.
Six business areas expected to be good investments going forward are:
1. Among currently significant trends is the aging of the baby boomer generation--the millions of people becoming seniors, representing a huge niche with considerable needs and enormous buying power. And there is an abundance of products and services that contribute to the recreation, education and health of Americans over 55.
2. Rapid expansion of the Internet as a vehicle for communication, education, entertainment and, of course commerce, has led to thousands of opportunities to run a business on a computer from the owner’s kitchen table. It’s hard to say “no” to an opportunity that lets you work in pajamas, but make sure any work-at-home opportunity has established a track record of profitability, and has a substantial and growing base of customers and prospects.
3. Another business area on the rise involves sale of products and services that fit into the ‘green’ marketplace. More and more for-sale offerings involve companies that, for example, provide recycling services, sell “earth-friendly” products, and help their customers reduce energy expenditures. As with other emerging industries, opportunities in the “green” economy should be carefully evaluated by entrepreneurs ready to buy businesses and interested in this sector.
4. The economy may be on the road to recovery, but it will be a long time before people are spending at the rates they did before the recession. That’s good news for thrift stores, sellers of do-it-yourself products and other merchants who help customers stretch their dollars. And that means business buyers searching for a company with a strong future should consider enterprises that cater to a budget-conscious clientele.
5. While still in its early stages, the buy-local movement is catching on in a number of communities across the country. Those wanting to buy businesses and choosing between a franchise with a national footprint, and an independent operation owned by a neighbor of his customers, ought to become informed about this trend. It might be a smart buying move to look for opportunities established in areas where consumers avoid products imported from countries with inferior quality standards. These often are the same customers who also seek to keep their dollars circulating in their community and are motivated to contribute to the success of merchants they know, rather than to “line the pockets” of executives at national chains based hundreds of miles away. This brand of buyer is becoming more common and many businesses that cater to her buying criteria stand to profit.
6. And as more people get back into the workforce, undertaking 60-hour weeks or the two-job careers needed to make ends meet, they’ll need services to watch the kids, weed and water the flower bed and walk the dog. And the nice thing about being in a business that provides personal or home services is that no competitor will undercut you in price with their manufacturing plants or call centers based in low-wage parts of the world. The range and variety of these services are virtually limitless. With some investigation entrepreneurs preparing to buy businesses of this type will be able to find one providing a service that coincides with the buyer’s interests or experience.
While there may be businesses that seem appealing for nostalgic reasons, an entrepreneur interested in buying a company with a promising future should say ‘no’ to offerings of enterprises dependent on yesterday’s technologies and out-of-date buying habits. That means investigating the kind of businesses prepared to profit during economic and living conditions we expect to experience in the new decade.
About the Author: For over 25 years Founder and CEO of BizBen.com, Peter Siegel, MBA has been consulting small business owners, business buyers, business brokers & agents assisting them with selling and buy businesses topics & issues. Peter Siegel, MBA can be reached at 925-785-3118.
Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business
Comments Regarding This Blog Post
These are all things that are very important to younger generations. I have found that the Millennial generation and below, extremely value many of these points mentioned. As it pertains to restaurants, which I sell, I've found that "locally grown" or "cage-less farms" are important in regards to consumers. A customer is very interested where the meat or poultry came from, and if it is free from hormones, and that it comes from a farm where the animals aren't all together in a cage. Employees that work in these businesses of a younger generation, want to feel that they are valued as people and not just a clog in the wheel. I would say that for customers, they want to feel that their buying experience is authentic, and many young customers are skewing away from major corporations, the same sterile corporations that may have affected their parents or those of older generations in the 2008 financial collapse, i.e downsizing and early retirement, etc. Many communities make it a point to do business with local businesses as opposed to corporate stores, by having "Support a local business day".